Bitcoin has been the clear market leader in crypto since its introduction in 2009.
The market capitalization greatly exceeds that of all other crypto assets. CryptoSlate market data shows Bitcoin has a market cap of $ 334 billion, while Ethereum has a market cap closer to $ 62 billion.
A leading Wall Street veteran working in space recently postulated that this could change in the years to come.
He said that Ethereum actually has the potential to surpass BTC’s market cap in the coming decade.
Here’s why he thinks this way.
Raoul Pal “flips” about the Bitcoin Ethereum
Since Ethereum reached a few dozen percent of BTC’s market capitalization in 2017, the term “flippening” has been widely used in this area.
Some Ethereum proponents believe that cryptocurrency will eventually overcome BTC’s market cap. The idea is that BTC should find more acceptance over time due to its multi-faceted character as a store of wealth and medium of exchange.
Raoul Pal, Real Vision CEO and Wall Street veteran, recently advocated the idea.
In an extensive Twitter thread posted on the evening of December 10th, he highlighted how there are trillions and even trillions of dollars worth of financial applications that can be built on the cryptocurrency stack. Where Bitcoin will take the lead as collateral, Pal believes that Ethereum will be the level at which transactions are processed, debts are issued, assets are tokenized, and so on and so forth:
“My guess is that BTC is a perfect layer of collateral, but ETH could be bigger in terms of market capitalization in 10 years for the reasons mentioned above. Money and collateral are just the base layer. Everything builds on it. The store of value is security, the layer of trust and the exchange of values are greater. “
A few things to make you think …
If bitcoin is pristine digital security, the size of the global government bond market is $ 123 trillion.
Pretty great opportunity for Bitcoin.
– Raoul Pal (@RaoulGMI) December 11, 2020
To translate this into real life terms, M2 money is estimated to be worth $ 19 trillion in the US today. While this sounds like a lot, there are now quadrillion dollar worth of derivatives built on this capital base.
Pal seems to be suggesting that BTC will capture the base monetary component of finance while ETH could slurp the derivatives and settlement layer.
Not the only one who believes that
Chris Burniske, partner at Placeholder, has suggested that this transition could come sooner than most might think.
As CryptoSlate previously reported, the analyst commented that BTC and ETH will likely “compete against each other” at a trillion dollar valuation in the coming years.
He believes Ethereum’s burgeoning DeFi economy will provide the fuel for a relative worth versus BTC:
“In the meantime, $ ETH will be the new kid on the block for the mainstream – expect some madness to come with that realization. With $ ETH outperforming $ BTC throughout its lifespan (again graph below), not to mention lower network value and strong on-chain economies, I see every reason for $ ETHBTC to outperform ATHs. “
Ready to watch $ BTC & $ ETH compete to reach trillion worth? https://t.co/BAffYQMPSF
– Chris Burniske (@cburniske) August 9, 2020
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